Starwood Hotels & Resorts is poised to benefit from the spinoff of its time-share business and speculation that the industry is ripe for mergers.

NEW YORK (TheStreet) -- Starwood Hotels & Resorts (HOT) is poised to surpass its 5% gains this year, analysts say, benefiting from the spinoff of its time-share business and speculation it may acquire a competitor or be bought out.

The speculation began in April when Starwood Chairman Bruce Duncan said the board would conduct a strategic review and that no option for increasing shareholder value is off the table. The disclosure followed the February announcement that Frits van Paasschen would resign as CEO and that Adam Aron, who had been serving on the board since 2006, would hold the post in the interim.

Starwood, based in Stamford, Conn., also said in February that the time-share business, which generated $640 million of last year's $5.98 billion in revenue, would be turned into a separate publicly traded company. The plan mirrors the setup at time-share company Marriott Vacations Worldwide (VAC), which trades separately from Marriott International (MAR).

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"The spinoff is encouraging" because it moves the company closer to its goal of greater reliance on managing properties rather than owning them, said Morningstar analyst Dan Wasiolek. "Wall Street tends to reward companies that have a higher mix of managed properties, which tend to be more stable and can withstand downturns in the economy or hotel industry."